China’s innovation capacity expands rapidly

Innovation is at the heart of China’s 13th Five-Year Plan (2016-2020). With economic pressures forecast to persist, China is committed to fostering new development through innovation, a sector which continues to expand.

As China’s competitive advantages in low and raw material costs are eroded, the country has begun striving to upgrade its industrial structure, shifting its economy to a growth model that draws strength from innovation.

Yang Xu, president of Intel China, has confidence that innovation will become a new engine for Chinese economic growth, as the country is vigorously encouraging and embracing these concepts.

“We are a technology company. We believe innovation drives economy growth. And China has absolutely increased and stepped up innovation. China’s industry has absolutely experienced growth at a much faster pace,” Yang said.

A report joint issued by the National Center for Science and Technology Evaluation and Clarivate Analytics said China’s expenditure on research and development accounted for 1.42 percent of GDP in 2006, which increased to 2.1 percent in 2016.

And the latest Global Innovation Index (GII) showed China rose three places to 22nd on the list of the world’s most innovative nations in 2017, the only middle-income country to join the top 25 innovative economies.

Part of that success should be attributed to the government’s efforts with the 13th Five-Year Plan, which set the goals of becoming an “innovation nation” by 2020, an international leader in innovation by 2030, and a world powerhouse in scientific and technological innovation by 2050.

At the meantime, China’s huge consumer market deserves much of the credit.

“China presents a huge opportunity in many ways. First is the consumption of technology. At the same time, China is also a huge market for enabling these products and technologies. And China not only has large scale consumption power, it also has the industry capacity. When Chinese partners participate in a certain market segment, that segment will grow quickly,” Yang noted.

In that case, the enormous potential of the Chinese market is obvious. Not only with Chinese tech companies, which are raising their already massive presence in the domestic market, but international tech tycoons are shifting their attentions more to the mainland market as well.

For example, Intel senses huge potential in China, and is bringing its advanced chip manufacturing technology to local partners, in order to make chips for low-power internet of Things (IOT) and mobile products.

Moreover, the tech giant is also making efforts to build a better ecosystem to support the foundry business model, including offering design kits and proven intellectual properties, as well as innovative chip package and test capabilities.

“We work closely with our Chinese partners, with the Chinese industry, to drive innovation,” Yang stressed.

The company, on Sept 19 — officially deemed Technology and Manufacturing Day — forecasts that, by 2020, China will produce approximately more than one fifth of global data and the market size of China’s information communication technology (ICT) sector will exceed $530 billion.

And Yang is positive that China will be the world leader in advanced technology areas such as 5G, saying “we believe China would probably be one of the most aggressive countries to deploy 5G technology.”